F&N could break apart and be sold piecemeal

Sale of separate business units could yield best shareholder return, says IG Markets.

The assessment came after a new anonymous bidder threw their hat in the ring for the hospitality and serviced apartment arm of the business, which IG Markets noted was widely reported to be an offer made by OUE, an already established player in hospitality and property investment in Singapore and the region.

"F&N’s board quickly rejected the S$1.4 billion offer as they are in the midst of discussions to accept the already tabled takeover of Thai billionaire Charoen’s TCC Assets Ltd. The board statement suggested that entertaining this new offer at this late stage would be the wrong thing to do," IG Markets said.

"That said it is likely to have a material effect on the board’s recommendation to shareholders, expected tomorrow. This new offer shows that Charoen’s initial offer of $8.88 a share undervalues the company, especially the property portfolio," it added.

"In addition there is potential for other interest out there and perhaps, if it is the end of the road for F&N as the entity we know, a sale of separate business units could yield the best return for shareholders," it said further.